Gold jewelry on display in a shop window in the Gold Souk in the Deira district of Dubai, United Arab Emirates Image Credit: Bloomberg

Gold inched up on Friday, en route to a weekly gain, buoyed by the dollar's retreat on a perceived dovish tilt in the US Federal Reserve's interest rate hike strategy.

Spot gold gained 0.2 per cent to $1,758.41 per ounce by 0223 GMT, and was up 0.5 per cent so far this week. U.S. gold futures rose 0.7 per cent to $1,758.30.

Silver was flat at $21.51, but was up about 3 per cent for the week.

A "substantial majority" of Fed policymakers agreed it would "likely soon be appropriate" to slow the pace of rate hikes, the readout of the Nov. 1-2 meeting showed on Wednesday.

This put the dollar on course for a weekly decline, making gold cheaper for overseas buyers.

The retracement in the dollar has kept gold well-supported as "the slower pace of rate outlook is being looked upon as a sign of peak hawkishness to further unwind the bearish positioning in the yellow metal built up since the start of the year," said IG market strategist Yeap Jun Rong.

But the December FOMC (Federal Open Market Committee) meeting will be a "black box" event given the variation in projections before and after recent cooler-than expected U.S.

Inflation data, leaving gold sensitive to upcoming data as buyers look "for greater conviction that current rate hike expectations are well-anchored." A majority of traders expect a 50 bps rate increase at the Fed's December meeting, while chances of 75 bps hike were pegged at about 34.5 per cent.

High interest rates have kept a leash on gold's traditional status as a hedge against high inflation and other uncertainties this year, as they translate into higher opportunity cost to hold the non-yielding asset.

Holdings of the largest gold-backed exchange-traded-fund, New York's SPDR Gold Trust have shed about 68 tonnes since the beginning of this year.

Platinum was little changed at $988.08, while palladium firmed 0.2 per cent to $1,883.40.

Copper climbs on dollar weakness, gains capped by six-year high charges
Beijing: Prices of copper climbed on Friday, supported by a weaker dollar, while its gains were limited by six-year high treatment and refining charges (TC/RCs) that reflected an expected oversupply of copper concentrate.

Three-month copper on the London Metal Exchange was up 0.3% to $8,062 a tonne by 0239 GMT, while the most-traded December copper contract on the Shanghai Futures Exchange moved up 0.4% to 65,230 yuan ($9,112.75) a tonne.

The dollar stood close to a three-month low and was on track for a weekly loss on Friday, as the prospect of the Federal Reserve slowing U.S. interest rate increases as soon as December dominated investors' minds and kept the mood buoyant.

A weaker U.S. currency supports metals prices as it makes it cheaper for non-dollar holders to buy greenback-priced commodities.

Miner Freeport-McMoRan has agreed TC/RCs of $88 a tonne and 8.8 cents per pound for copper concentrate supply in 2023 with Chinese smelters, a source close to the negotiations told Reuters.

The charges, paid by miners to smelters to process ore into refined metal, are the highest since 2017 and 35% higher than the 2022 benchmark, due to an expected oversupply of copper concentrate.

Among other metals, LME aluminium advanced 0.8% at $2,385.5 a tonne, zinc rose 0.6% at $2,934 a tonne, while lead ended down 0.3% to $2,124 a tonne.

SHFE aluminium dipped 0.1% at 18,965 yuan a tonne, zinc gained 0.6% at 23,845 yuan a tonne, tin added 1.1% at 184,310 yuan a tonne, and nickel was up 0.4% at 200,040 yuan a tonne.